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Shadow price of water for irrigation—A case of the High Plains

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  • Ziolkowska, Jadwiga R.

Abstract

The 2011 and 2012 droughts considerably affected the Ogallala Aquifer supplying irrigation water for agricultural production in the US High Plains (HP). Shrinking water resources and growing demand for water create a challenging tradeoff situation. This also poses a question about the value of water and efficient water allocation. Currently, water rates for irrigating crops paid by farmers do not reflect the actual value of water that can be expressed solely as a shadow price. Also studies are missing that would comprehensively compare different states and different crops in one methodological framework. This paper helps to fill this gap. Farm-budget residual valuation is applied to estimate the shadow price of water for irrigation in three High Plains states: Texas, Kansas and Nebraska, for five prevailing crops: corn, cotton, sorghum, soybean, and wheat.

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  • Ziolkowska, Jadwiga R., 2015. "Shadow price of water for irrigation—A case of the High Plains," Agricultural Water Management, Elsevier, vol. 153(C), pages 20-31.
    • Handle: RePEc:eee:agiwat:v:153:y:2015:i:c:p:20-31
    DOI: 10.1016/j.agwat.2015.01.024
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